[Core Information] Analog chip recovery, storage technology iteration, and global production capacity transfer

1. Analog chips: ADI’s financial report exceeded expectations, and industry and automobiles led the recovery

• core data(FY2025 Q1, ending February 1):
  • revenue：$2.423 billion(YoY - 4%), higher than market expectations.
  • Gross profit margin：59%(+0.3 percentage points year-on-year), with solid profitability.
  • Order：Bookings continue to improve, laying the foundation for growth.
• Recovery momentum：
  • Industry(Accounting for ~44.5%): Quarter-on-quarter growth for three consecutive quarters, with strong demand for AI-related equipment.
  • car(Accounting for ~30%): Double-digit growth year-on-year, driven by ADAS and new energy.
  • consumption: Achieved strong year-on-year **double-digit (19%)** growth.
• Management Outlook: ConfirmOvercome the industry downturn, expectedQ2 achieved both month-on-month and year-on-year growth, confident of a return to growth in fiscal 2025.

2. Storage market: The DDR era is over, 3D NAND moves towards higher stacking

1. DRAM: Three major original manufacturers plan to stop production of DDR3/DDR4 in 2025

• Manufacturer news：
  • Samsung: DDR3 production has been discontinued in Q2 2024, and some DDR4 orders will be stopped starting in April 2025.
  • SK hynix: DDR3 production will be discontinued at the end of 2023, and the proportion of DDR4 production capacity has dropped toBelow 20%。
  • Micron: Following up on production cuts, it plans to exit the low-profit DDR4 market.
• core reasons: Comprehensive shift in production capacityDDR5withHBM(High Bandwidth Memory), HBM margins for DDR43-4 times。
• market impact: The supply of traditional memory will shrink significantly.Prices are expected to recover; Domestic manufacturers (such as Changxin) are expected to fill the niche market gap.

2. NAND Flash: Kioxia releases tenth generation 332-layer stacking technologykioxia

• technological breakthrough（ISSCC 2025）：
  • Number of stacking layers: From 8th generation218 floorsjump to332 floors, the bit density is improved59%。
  • interface speed:AdoptToggle DDR6.0, the speed reaches4.8Gb/s（+33%）。
  • Power consumption optimization: Introducing PI-LTT technology, input power consumption **-10%, output power consumption-34%**。
• Key process: Adopt **CBA (CMOS Direct Bonding Array)** technology to improve performance and yield.

3. Domestic chips: Loongson server CPU advancement, radio frequency chip breakthrough

• Loongson Zhongke：
  • Server CPU：3C6000series (16/32/64 core) inSample teststage, expected2025 Q2Officially released.
  • Other product lines: Desktop CPU3B6600Under design; GPGPU9A1000Tape-out is expected in the first half of the year.
• Guobo Electronics：
  • RF chip: Various stylesRF switches, antenna tunersrealizeBulk delivery, the performance reaches the domestic advanced level.
  • Base station business：5G-ASynaesthesia integrated base station chip is being optimized, with specifications reachingInternational leader。

4. Global production capacity: expansion in Southeast Asia, layout in India, and policy enhancement

1. Packaging, testing and manufacturing: ASE and Murata accelerate global decentralized layout

• sun and moonlight：Penang, Malaysia$300 millionNew factory opened, focusAutomotive semiconductorswithAI chipClosed and tested, the factory area expanded to3.4 million square feet。
• Murata Manufacturing Co., Ltd..：
  • ** 3500㎡ for rent in Indiafactory forMLCC (Multilayer Ceramic Capacitor)** Packaging and Shipping.
  • FY2026Fully operational and designed toDiversify supply chain risks, to match localization needs.

2. Policy support: Beijing Haidian has a maximum subsidy of RMB 15 million to support the production of films

• Subsidy details：
  • MPW tape-out：The highest in the country50%, upper limit3 million;Highest overseas30%, upper limit2 million。
  • Engineering tape-out：Domestic14nm and belowhighest30%, upper limit8 million;The most mature process20%, upper limit5 million。
  • total cap:Single enterprise yearUp to 15 million yuan。

5. Summary of core trends this week

1. Cycle turning point established: withADIrepresented byAnalog chipThe industry confirms bottoming out and rebounding,Industrial and AutomotiveIt is the core engine.
2. Great changes in storage structure：DDR3/DDR4Accelerate the withdrawal from the stage of history,HBM/DDR5with3D NAND(332 layers) becomes the main line of technology.
3. Domestic products attack high-end：Loongson 3C6000server chips,Guobo ElectronicsRadio frequency chips continue to make breakthroughs, narrowing the gap with the international market.
4. Supply chain restructuring：ASE, MurataWaiting for the giants to increase their investmentSoutheast Asia, India, geopolitics drives the decentralization of global production capacity.